What’s Does Legal Insurance Cover?

What’s Does Legal Insurance Cover?. You’ll find legal insurance referred to by several names, including legal protection insurance (LPI), prepaid legal plans (PPL) or legal expenses insurance (LEI).

Nomenclature aside, legal insurance can provide coverage for a broad range of legal issues, which might span from simple traffic tickets to adoption assistance or disputes with contractors — and many things in between.

Here are some of the common uses for legal insurance:
  • Traffic tickets
  • Tax questions or representation
  • Bankruptcy or credit problems
  • Consumer protection
  • Injury/damage claims
  • Contract assistance
  • Legal document preparation
  • Estate planning
  • Wills and trusts
  • Buying or selling property
It’s important to know what legal insurance covers and what it doesn’t cover. For example, it’s common to find limitations or exclusions for legal assistance regarding divorce or family law, like custody issues.

You may also find some categories of legal services either aren’t covered or are covered with a reduced fee structure as opposed to services being paid in full. Many plans also require a deductible of up to $250 before services are covered, although some are offered with no deductible.

Coverage tends to be the most complete for consumer protection, real estate issues and legal needs surrounding wills and trusts. For other categories of legal matters, coverage can be more selective, with limitations or exclusions possibly preventing full coverage.

Many plans cover claims for the insured as well as their spouse or domestic partner. Children may also be covered up through age 18; students may have coverage available until age 25 with some plans. Coverage is limited to personal legal needs, however. If your legal matter concerns your business or professional actions, coverage is likely to be excluded.

It’s also common to find a waiting period requirement for certain types of coverage. This waiting period can be as long as 6 months. You might find a waiting period is required for divorce matters, misdemeanors, refinancing or tax audits, which means there is no coverage for these types of legal matters during the waiting period after you purchase your plan.

Some legal insurance plans also provide online learning centers and access to DIY legal documents that are prepared and reviewed by attorneys for accuracy and state-specific compliance in all 50 states.

Who Should Get Legal Insurance?

What’s Does Legal Insurance Cover?
What’s Does Legal Insurance Cover?

Most households don’t need a lawyer on a regular basis. However, when you do need an attorney, the cost can be hundreds of dollars per hour and legal fees can add up quickly. Purchasing legal insurance can be an affordable way to reduce legal costs when you do need a lawyer’s help.

Consider the available coverages carefully. If your goal is to provide general consumer protection and contract assistance, a legal insurance plan can be a great value with most plans priced under $1 per day.

However, a legal insurance plan may not be much help in contested divorces, custody issues or even DUI cases due to coverage limitations and exclusions.

The average household spends much more each month on a gourmet coffee or cable television than the cost of a legal insurance plan, which paints the cost of legal insurance in a different light.

View legal insurance for what it is: a limited insurance policy that will cover many legal needs — but maybe not all. If you only use your coverage once, the coverage may have paid for itself in savings.

How Much Does It Cost?

Legal insurance costs less than most life insurance policies and much less than home or auto insurance. Plan costs range from about $0.50 per day up to about $1 per day for most plans. Most providers offer 2 or more plans, with top-tier plans offering more coverages or reduced costs for coverages that aren’t fully paid by the plan.

Learn what’s covered by the plan and compare the coverages to your expected needs. In many cases, without a sizeable difference in cost, the step-level plans may be a better value because entry-level plans have more limitations.

In addition to our selection below, check with your employer to see if it offers legal insurance as a benefit. Many legal insurance providers only bind coverage through brokers or as group coverage plans.

What to Look for in a Policy

Not all legal insurance plans are created equal. High deductibles or a large number of excluded services can put one provider ahead of another when choosing the best legal insurance.

Affordable deductibles. Legal insurance deductibles can range from $0 up to hundreds of dollars. In the latter case, consider the coverages and monthly costs carefully. You may find that most smaller claims aren’t covered at all due to the deductible.

Wide attorney network. Choice is good and a wide network of attorneys makes it more likely that you’ll find a specialist in your area. Some plans even allow out-of-network attorneys, but additional costs may apply.

Broad coverage for different types of legal matters. Some types of legal matters that aren’t covered by one provider may be provided by another — but perhaps with a waiting period requirement. A broad selection means better coverage because you often don’t know beforehand which services you’ll need.

Beware of plans that place limitations on all but a few types of legal matters.
Full coverage compared to reduced costs. Some plans only offer reduced pricing and don’t provide full coverage or only provide full coverage for a few types of legal matters.

The trade off is that discount plans can be more affordable on a monthly basis than full coverage plans.

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